Monarch Community Bancorp Inc. (MCBF, Financial) filed Quarterly Report for the period ended 2010-06-30.
Monarch Community Bancorp Inc. has a market cap of $2.21 million; its shares were traded at around $1.08 with and P/S ratio of 0.11.
Total deposits decreased $11.9 million, or 5.6%, from $213.4 million at December 31, 2009 to $201.5 million at June 30, 2010. The decline in deposits included decreases of $9.7 million in money market deposits, $4.9 million in brokered certificates of deposits and $3.5 million in local certificates of deposit. The Bank continues to be committed to increasing its core deposit balances during 2010 and saw increases in demand deposits of $1.4 million and in interest bearing checking and savings accounts of $4.8 million.
Total equity was $15.1 million at June 30, 2010 compared to $23.2 million at December 31, 2009. This represents 5.7% and 8.2% of total assets at June 30, 2010 and December 31, 2009, respectively. Decreases in equity for the six months ended June 30, 2010 included a net loss of $8.1 million and $170,000 in accrued dividend payments on the Preferred Stock. The annual 5% dividend on the Preferred Stock together with the amortization of the discount will reduce net income (or increase the net loss) applicable to common stock by approximately $350,000 annually. Effective February 2010, the Corporation deferred regularly scheduled dividend payments on the $6.7 million in principal outstanding on its Series A fixed rate, cumulative perpetual preferred stock (aggregate liquidation preference of $6.8 million) which was issued to the U.S. Treasury in February 2009.
The provision for loan losses was $7.0 million in the second quarter of 2010 compared to $3.4 million for the second quarter of 2009. The significant increase in the provision was primarily driven by the continued deteriorating economic conditions in Michigan and weaknesses in the local real estate markets which resulted in downgrades to the credit ratings of certain loans in the portfolio and a significant increase in the balances of nonperforming loans. The Company continues to monitor real estate dependent loans and focus on asset quality. Non-performing assets totaled $27.3 million at the end of the second quarter of 2010, an increase of $8.9 million from December 31, 2009. Net charge offs for the quarter ended June 30, 2010 were $3.5 million compared to $1.1 million for the same period in 2009. Year to date 2010 net charge offs totaled $4.9 million compared to $1.3 million for the same period a year ago. Net charge offs year to date consisted of 46% one to four family residential mortgages, 26% construction, 26% commercial real estate, and the remaining 3% included consumer, commercial and industrial and home equity lines of credit.
Non-interest income for the six months ended June 30, 2010 decreased $916,000, or 32.2%, from $2.8 million to $1.9 million for the same period in 2009. Net gain on sale loans decreased $1.1 million for the six months ended June 30, 2009 from $1.5 million to $349,000 compared to the same period a year ago. Fees and Service charges increased $44,000 for the six months ended June 30, 2010 compared to the same period a year ago. The increase in fees and service charges is primarily due to an increase in deposit related fees of $24,000 which consists of an increase in ATM income of $28,000 and in early withdrawal penalties of $18,000. Overdraft fees decreased $18,000 as a result of customers managing their finances more closely in order to reduce overdraft fees because of the current challenging economic conditions. All other deposit fees decreased $4,000. An increase in loan related fees of $20,000 which consisted of an increase in Brokered loan income of $16,000 also significantly impacted fees and service charges.
Noninterest expense decreased $96,000, or 3.7%, for the three months ended June 30, 2010 compared to the same period ending a year ago. Salaries and employee benefits decreased $30,000. The decline in personnel expense was primarily attributable to a decline in general staffing, the discontinuance of our 401k match and the increased employee match for health insurance coverage. Amortization of mortgage servicing rights decreased $55,000 as a result of the slow down in residential mortgage refinancing activity mentioned previously. Foreclosed property expense decreased $18,000. Other operating expenses decreased $115,000. Professional services increased $122,000 primarily due to increases in legal fees associated with non-performing loans.
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Monarch Community Bancorp Inc. has a market cap of $2.21 million; its shares were traded at around $1.08 with and P/S ratio of 0.11.
Highlight of Business Operations:
The allowance for loan losses was $9.8 million at June 30, 2010 representing 4.79% of total loans, compared to $5.8 million at December 31, 2009, or 2.62% of total loans and $5.5 million at June 30, 2009 or 2.35% of total loans. The increase of $4.0 million during the six months ended June 30, 2010 was necessitated by the increases in net charge offs and nonperforming assets which are directly related to the continued overall weakness in the Michigan economy. Net charge offs totaled $4.9 million compared to $1.3 million for the same period a year ago. Net charge offs year to date consisted of 26% construction loans, 44% one to four family residential mortgages, 26% commercial real estate, and the remaining 4% included consumer, commercial and industrial and home equity lines of credit. The allowance for loan losses to non-performing loans ratio was 41.4% at June 30, 2010 compared to 37.14% at December 31, 2009 and 69.6% at June 30, 2009. See Provision for Loan Losses below for further explanation regarding charge-offs and non-performing loans. The current level of the allowance for loan losses is the result of managements assessment of the risks within the portfolio based on the information revealed in credit monitoring processes.Total deposits decreased $11.9 million, or 5.6%, from $213.4 million at December 31, 2009 to $201.5 million at June 30, 2010. The decline in deposits included decreases of $9.7 million in money market deposits, $4.9 million in brokered certificates of deposits and $3.5 million in local certificates of deposit. The Bank continues to be committed to increasing its core deposit balances during 2010 and saw increases in demand deposits of $1.4 million and in interest bearing checking and savings accounts of $4.8 million.
Total equity was $15.1 million at June 30, 2010 compared to $23.2 million at December 31, 2009. This represents 5.7% and 8.2% of total assets at June 30, 2010 and December 31, 2009, respectively. Decreases in equity for the six months ended June 30, 2010 included a net loss of $8.1 million and $170,000 in accrued dividend payments on the Preferred Stock. The annual 5% dividend on the Preferred Stock together with the amortization of the discount will reduce net income (or increase the net loss) applicable to common stock by approximately $350,000 annually. Effective February 2010, the Corporation deferred regularly scheduled dividend payments on the $6.7 million in principal outstanding on its Series A fixed rate, cumulative perpetual preferred stock (aggregate liquidation preference of $6.8 million) which was issued to the U.S. Treasury in February 2009.
The provision for loan losses was $7.0 million in the second quarter of 2010 compared to $3.4 million for the second quarter of 2009. The significant increase in the provision was primarily driven by the continued deteriorating economic conditions in Michigan and weaknesses in the local real estate markets which resulted in downgrades to the credit ratings of certain loans in the portfolio and a significant increase in the balances of nonperforming loans. The Company continues to monitor real estate dependent loans and focus on asset quality. Non-performing assets totaled $27.3 million at the end of the second quarter of 2010, an increase of $8.9 million from December 31, 2009. Net charge offs for the quarter ended June 30, 2010 were $3.5 million compared to $1.1 million for the same period in 2009. Year to date 2010 net charge offs totaled $4.9 million compared to $1.3 million for the same period a year ago. Net charge offs year to date consisted of 46% one to four family residential mortgages, 26% construction, 26% commercial real estate, and the remaining 3% included consumer, commercial and industrial and home equity lines of credit.
Non-interest income for the six months ended June 30, 2010 decreased $916,000, or 32.2%, from $2.8 million to $1.9 million for the same period in 2009. Net gain on sale loans decreased $1.1 million for the six months ended June 30, 2009 from $1.5 million to $349,000 compared to the same period a year ago. Fees and Service charges increased $44,000 for the six months ended June 30, 2010 compared to the same period a year ago. The increase in fees and service charges is primarily due to an increase in deposit related fees of $24,000 which consists of an increase in ATM income of $28,000 and in early withdrawal penalties of $18,000. Overdraft fees decreased $18,000 as a result of customers managing their finances more closely in order to reduce overdraft fees because of the current challenging economic conditions. All other deposit fees decreased $4,000. An increase in loan related fees of $20,000 which consisted of an increase in Brokered loan income of $16,000 also significantly impacted fees and service charges.
Noninterest expense decreased $96,000, or 3.7%, for the three months ended June 30, 2010 compared to the same period ending a year ago. Salaries and employee benefits decreased $30,000. The decline in personnel expense was primarily attributable to a decline in general staffing, the discontinuance of our 401k match and the increased employee match for health insurance coverage. Amortization of mortgage servicing rights decreased $55,000 as a result of the slow down in residential mortgage refinancing activity mentioned previously. Foreclosed property expense decreased $18,000. Other operating expenses decreased $115,000. Professional services increased $122,000 primarily due to increases in legal fees associated with non-performing loans.
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